Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Semtech Corporation as such a stock due to the following factors:
- SMTC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.6 million.
- SMTC has traded 762,006 shares today.
- SMTC traded in a range 291.7% of the normal price range with a price range of $2.40.
- SMTC traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock s movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on SMTC:
Semtech Corporation, together with its subsidiaries, designs, develops, manufactures, and markets analog and mixed signal semiconductor products. SMTC has a PE ratio of 36.2. Currently there are 6 analysts that rate Semtech Corporation a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Semtech Corporation has been 699,500 shares per day over the past 30 days. Semtech has a market cap of $2.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.22 and a short float of 4.3% with 3.58 days to cover. Shares are up 1.3% year to date as of the close of trading on Tuesday.
rates Semtech Corporation as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 12.9%. Since the same quarter one year prior, revenues rose by 39.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 568.9% when compared to the same quarter one year prior, rising from $2.21 million to $14.78 million.
- Net operating cash flow has significantly increased by 246.15% to $17.15 million when compared to the same quarter last year. In addition, SEMTECH CORP has also vastly surpassed the industry average cash flow growth rate of -22.21%.
- The gross profit margin for SEMTECH CORP is rather high; currently it is at 56.55%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.09% trails the industry average.
- Despite currently having a low debt-to-equity ratio of 0.45, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that SMTC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.21 is high and demonstrates strong liquidity.
- You can view the full Semtech Corporation Ratings Report.